30-30-30 by 2030 Plan

03/09/11

By Spencer Abraham

(Guest Editorial reprinted from National Journal’s Energy & Environment Experts Blog on March 9, 2011 on the topic of how to power America in three decades.)

In my recently published book, Lights Out: Ten Myths About and Real Solutions To Our Energy Crisis, I outlined a strategy for America’s power sector that could help us address our energy security and environmental challenges. I believe that with a focused effort and an aggressive federal commitment to devising constructive energy policy, we could dramatically revamp the composition of our power markets between now and 2030.

I call my plan the 30—30—30 by 2030 strategy. It calls for us to produce 30% of our power from nuclear and 30% from natural gas and clean coal by the target date. It also calls for us to generate another 30% from a combination of renewable energy and reductions in demand as a result of energy efficiency improvements during this timeframe.

To get there I recommend we take such actions as:

Extending Investment Tax and Production Tax Credits in gradually phased out forms for renewable energy for ten years. This action will eliminate the incredible uncertainties that currently impede investment in renewables (because these credits need to be regularly extended and Congress has not acted in a timely fashion) and as a result have undermined the maturation of these industries. I suggest that much of the cost of such credits be offset with reductions in other energy subsidies and supports.

Investing federal dollars – alongside private sector investments – to build new nuclear plants, with the US owning a stake in new nuclear facilities equivalent to the size of its investment. The problem with nuclear energy is the reluctance of private capital to take the enormous political risks associated with financing new plants. However, if the US were a substantial or equal partner, private dollars would flow and the plants would be built. Once operational, there is little doubt that the government’s interest in these plants will be attractive and the taxpayers will realize their initial investment – and a profit – when the government’s share is sold.

Encouraging state governments and utility commissions to support and encourage utilities to invest in the installation of a modern, intelligent, electricity grid. Smart grid technology can dramatically improve energy efficiency, but the states have to provide roadmaps and support to their utilities to bring about a transition to new systems.

Expediting the process for permitting offshore wind energy farms. Offshore wind can play a big part in our future energy mix, but we have to follow the lead of countries like the UK and get it built. Unfortunately, current regulatory barriers have established a timetable for the permitting of offshore wind facilities that is far too long to allow the companies in this new industry to secure financing. A sensible but shorter approach consistent with environmental safety is essential.

Providing the support necessary to allow for the production of the vast quantities of shale gas that the US possesses. Recent news stories have raised a cloud of suspicion about shale gas and the fracking technologies that help us produce it. It is not hard to imagine this entire industry forced to stand down while politicians jockey for position on the legitimacy and safety of these new technologies. That cannot be allowed to happen. Without shale reserves the US will find itself unable to meet the growing demand for natural gas, which will diminish the potential role gas can play in our power mix, and drive the price back up to the double-digit levels we faced just a few short years ago.

I believe that this plan can be accomplished, and that we can reconfigure our energy mix in the way it proposes, by 2030. If we get that far in 20 years there is no doubt in my mind that by 2040 we can make even more progress in terms of energy efficiency gains and increasing the role of nuclear power, clean coal and renewables in the power generation sector. As we make those changes we can accommodate the larger level of demand that will be required to meet the challenge of electric vehicles and the broader use of natural gas for industrial and transportation purposes – both in terms of natural gas vehicles (for large fleets) and as part of a “gas-to-liquids” effort, which would allow us to utilize liquids derived from natural gas to power conventional vehicles without requiring a massive change in our transportation fuel infrastructure.

These goals can be met, but policy makers will have to depart from the traditional practice of postponing tough decisions on energy matters. For too long we have been content to pass energy challenges to the next generation of political decision makers. But, we are running out of time. As the clock ticks down, our choices narrow and our opportunity to surmount the hurdles we confront diminishes. We need to act on energy now.